BILL NUMBER: AB 2509	CHAPTERED  09/29/00

	CHAPTER   876
	FILED WITH SECRETARY OF STATE   SEPTEMBER 29, 2000
	APPROVED BY GOVERNOR   SEPTEMBER 28, 2000
	PASSED THE ASSEMBLY   AUGUST 30, 2000
	PASSED THE SENATE   AUGUST 29, 2000
	AMENDED IN SENATE   AUGUST 25, 2000
	AMENDED IN SENATE   AUGUST 7, 2000
	AMENDED IN SENATE   JULY 6, 2000
	AMENDED IN SENATE   JUNE 26, 2000

INTRODUCED BY   Assembly Member Steinberg

                        FEBRUARY 24, 2000

   An act to amend Sections 98.1, 98.2, 203.1, 218.5, 226, 350, 351,
and 1174 of, and to add Sections 218.6, and 226.7 to, the Labor Code,
relating to employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2509, Steinberg.  Employment:  remedies for employment law
violations.
   Existing law authorizes the Labor Commissioner to conduct
administrative hearings and issue orders, decisions, and awards for
recovery of wages, penalties, and other demands for compensation
properly before the Division of Labor Standards Enforcement or the
commissioner.  Existing law requires these awards for unpaid wages to
accrue interest at a specified adjusted annual rate determined under
the tax laws.
   This bill would instead require this rate to be the same as the
legal rate of interest payable upon a contract obligation in default
where the contract does not otherwise specify the rate of interest.
   Existing law provides that any order, decision, or award made by
the Labor Commissioner in these administrative proceedings may be
appealed by filing an action in the municipal or superior court.
   This bill would require employers filing such an appeal to post a
prescribed undertaking and would provide for disposition thereof.
   Under existing law, an employer in the building and construction
industry is liable for a penalty of up to 30 days' wages and fringe
benefits to any employee paid by a check, draft, or voucher that is
drawn on a nonexistent account or that is dishonored for insufficient
funds if the instrument is presented for payment within 30 days of
receipt.  This penalty does not apply if the employer can establish
that the violation was unintentional.
   This bill would make this penalty applicable to all employers, as
specified, and would make related conforming and technical,
nonsubstantive changes.
   Under existing law, the prevailing party, with certain exceptions,
is entitled to an award of attorney's fees in an action brought for
nonpayment of wages, fringe benefits, or health and welfare or
pension fund contributions.
   This bill would add an express exception for employee actions to
recover underpayment of the minimum wage or specified overtime wages,
in which a prevailing employee but not the employer is expressly
authorized to recover attorney's fees.  The bill would also require
the court, in an action to recover unpaid wages, to award interest,
as specified.
   Under existing law, employers are required to provide employees
semimonthly, with payment of wages, an itemized statement listing
gross wages, total hours worked by employees paid by the hour,
specified deductions, net wages, and certain other information.
Violation of these requirements is a misdemeanor.  Under existing
law, an employee suffering injury as a result of the employer's
knowing or intentional failure to comply with this requirement is
entitled to recover the greater of actual damages or $100, plus costs
and reasonable attorney's fees.
   This bill would provide that total hours need not be disclosed for
salaried employees exempt from payment of overtime compensation.
The bill would impose a state-mandated local program by requiring
disclosure of  the number of piece-rate units and the applicable
piece rate for employees paid on that basis and by requiring
disclosure of all applicable hourly rates and the number of hours
worked by the employee at each rate.  The bill would revise the
liability of employers for knowing or intentional noncompliance with
this disclosure requirement to entitle an aggrieved employee to
recover the greater of actual damages or penal damages of $50 for the
initial pay period in which a violation occurs and $100 per employee
for each subsequent pay period in which the violation occurs up to
$4,000, plus costs and reasonable attorney's fees.
   Existing law authorizes the Industrial Welfare Commission to adopt
orders respecting wages, hours, and working conditions.
   This bill would require any employer that requires any employee to
work during a meal or rest period mandated by an order of the
commission to pay the employee one hour's pay for each workday that
the meal or rest period is not provided.
   Existing law prohibits employers from receiving or deducting
gratuities intended for employees from wages otherwise payable.
Violation is a misdemeanor.  Under existing law, this prohibition is
not applicable to an employee that has a guaranteed wage or salary
that is at least the higher of the federal or state minimum wage.
   This bill would delete the above exemption, thereby imposing a
state-mandated local program.  As so revised, the bill would make
these provisions applicable to amounts paid by patrons directly to a
dancer subject to specified orders of the commission.  The bill would
also impose a state-mandated local program by requiring employers to
remit to their employees gratuities paid by credit card, without
deduction for credit card fees, not later than the next regular
payday following the date the credit card payment is authorized by
the patron.
   Existing law requires employers to keep specified payroll records.

   This bill would require these payroll records to identify the
number of piece-rate units earned by employees and any applicable
piece rate paid to employees.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  Section 98.1 of the Labor Code is amended to read:
   98.1.  (a) Within 15 days after the hearing is concluded, the
Labor Commissioner shall file in the office of the division a copy of
the order, decision, or award.  The order, decision, or award shall
include a summary of the hearing and the reasons for the decision.
Upon filing of the order, decision, or award, the Labor Commissioner
shall serve a copy of the decision personally or by first-class mail
on the parties.  The notice shall also advise the parties of their
right to appeal the decision or award and further advise the parties
that failure to do so within the period prescribed by this chapter
shall result in the decision or award becoming final and enforceable
as a judgment by the appropriate municipal or superior court, in
accordance with the appropriate rules of jurisdiction.
   (b) For the purpose of this section, an award shall include any
sums found owing, damages proved, and any penalties awarded pursuant
to this code.
   (c) All awards granted pursuant to a hearing under this chapter
shall accrue interest on all due and unpaid wages at the same rate as
prescribed by subdivision (b) of Section 3289 of the Civil Code.
The interest shall accrue until the wages are paid from the date that
the wages were due and payable as provided in Part 1 (commencing
with Section 200) of Division 2.
  SEC. 2.  Section 98.2 of the Labor Code is amended to read:
   98.2.  (a) Within 10 days after service of notice of an order,
decision, or award the parties may seek review by filing an appeal to
the municipal or superior court, in accordance with the appropriate
rules of jurisdiction, where the appeal shall be heard de novo.  A
copy of the appeal request shall be served upon the Labor
Commissioner by the appellant.  For purposes of computing the 10-day
period after service, Section 1013 of the Code of Civil Procedure
shall be applicable.
   (b) Whenever an employer files an appeal pursuant to this section,
the employer shall post an undertaking with the reviewing court in
the amount of the order, decision, or award.  The undertaking shall
consist of an appeal bond issued by a licensed surety or a cash
deposit with the court in the amount of the order, decision, or
award.  The employer shall provide written notification to the other
parties and the Labor Commissioner of the posting of the undertaking.
  The undertaking shall be on the condition that, if any judgment is
entered in favor of the employee, the employer shall pay the amount
owed pursuant to the judgment, and if the appeal is withdrawn or
dismissed without entry of judgment, the employer shall pay the
amount owed pursuant to the order, decision, or award of the Labor
Commissioner unless the parties have executed a settlement agreement
for payment of some other amount, in which case the employer shall
pay the amount that the employer is obligated to pay under the terms
of the settlement agreement.  If the employer fails to pay the amount
owed within 10 days of entry of the judgment, dismissal, or
withdrawal of the appeal, or the execution of a settlement agreement,
a portion of the undertaking equal to the amount owed, or the entire
undertaking if the amount owed exceeds the undertaking, shall be
forfeited to the employee.
   (c) If the party seeking review by filing an appeal to the
municipal or superior court is unsuccessful in the appeal, the court
shall determine the costs and reasonable attorney's fees incurred by
the other parties to the appeal, and assess that amount as a cost
upon the party filing the appeal.
   (d) If no notice of appeal of the order, decision, or award is
filed within the period set forth in subdivision (a), the order,
decision, or award shall, in the absence of fraud, be deemed the
final order.
   (e) The Labor Commissioner shall file, within 10 days of the order
becoming final pursuant to subdivision (d), a certified copy of the
final order with the clerk of the municipal or superior court, in
accordance with the appropriate rules of jurisdiction, of the
appropriate county unless a settlement has been reached by the
parties and approved by the Labor Commissioner.  Judgment shall be
entered immediately by the court clerk in conformity therewith.  The
judgment so entered shall have the same force and effect as, and
shall be subject to all of the provisions of law relating to, a
judgment in a civil action, and may be enforced in the same manner as
any other judgment of the court in which it is entered.  Enforcement
of the judgment shall receive court priority.
   (f) In order to ensure that judgments are satisfied, the Labor
Commissioner may serve upon the judgment debtor, personally or by
first-class mail at the last known address of the judgment debtor
listed with the division, a form similar to, and requiring the
reporting of the same information as, the form approved or adopted by
the Judicial Council for purposes of subdivision (a) of Section
116.830 of the Code of Civil Procedure to assist in identifying the
nature and location of any assets of the judgment debtor.
   The judgment debtor shall complete the form and cause it to be
delivered to the division at the address listed on the form within 35
days after the form has been served on the judgment debtor, unless
the judgment has been satisfied.  In case of willful failure by the
judgment debtor to comply with this subdivision, the division or the
judgment creditor may request the court to apply the sanctions
provided in Section 708.170 of the Code of Civil Procedure.
   (g) Notwithstanding subdivision (e), the Labor Commissioner may
stay execution of any judgment entered upon an order, decision, or
award that has become final upon good cause appearing therefor and
may impose the terms and conditions of the stay of execution.  A
certified copy of the stay of execution shall be filed with the clerk
entering the judgment.
   (h) When a judgment is satisfied in fact, otherwise than by
execution, the Labor Commissioner may, upon the motion of either
party or on its own motion, order entry of satisfaction of judgment.
The clerk of the court shall enter a satisfaction of judgment upon
the filing of a certified copy of the order.
   (i) The Labor Commissioner shall make every reasonable effort to
ensure that judgments are satisfied, including taking all appropriate
legal action and requiring the employer to deposit a bond as
provided in Section 240.
   (j) The judgment creditor, or the Labor Commissioner as assignee
of the judgment creditor, shall be entitled to court costs and
reasonable attorney fees for enforcing the judgment that is rendered
pursuant to this section.
  SEC. 3.  Section 203.1 of the Labor Code is amended to read:
   203.1.  If an employer pays an employee in the regular course of
employment or in accordance with Section 201, 201.5, 201.7, or 202
any wages or fringe benefits, or both, by check, draft or voucher,
which check, draft or voucher is subsequently refused payment because
the employer or maker has no account with the bank, institution, or
person on which the instrument is drawn, or has insufficient funds in
the account upon which the instrument is drawn at the time of its
presentation, so long as the same is presented within 30 days of
receipt by the employee of the check, draft or voucher, those wages
or fringe benefits, or both, shall continue as a penalty from the due
date thereof at the same rate until paid or until an action therefor
is commenced.  However, those wages and fringe benefits shall not
continue for more than 30 days and this penalty shall not apply if
the employer can establish to the satisfaction of the Labor
Commissioner or an appropriate court of law that the violation of
this section was unintentional.  This penalty  also shall not apply
in any case in which an employee recovers the service charge
authorized by Section 1719 of the Civil Code in an action brought by
the employee thereunder.
  SEC. 4.  Section 218.5 of the Labor Code is amended to read:
   218.5.  In any action brought for the nonpayment of wages, fringe
benefits, or health and welfare or pension fund contributions, the
court shall award reasonable attorney's fees and costs to the
prevailing party if any party to the action requests attorney's fees
and costs upon the initiation of the action.  This section shall not
apply to an action brought by the Labor Commissioner.  This section
shall not apply to a surety issuing a bond pursuant to Chapter 9
(commencing with Section 7000) of Division 3 of the Business and
Professions Code or to an action to enforce a mechanics lien brought
under Chapter 2 (commencing with Section 3109) of Title 15 of Part 4
of Division 3 of the Civil Code.
   This section does not apply to any action for which attorney's
fees are recoverable under Section 1194.
  SEC. 5.  Section 218.6 is added to the Labor Code, to read:
   218.6.  In any action brought for the nonpayment of wages, the
court shall award interest on all due and unpaid wages at the rate of
interest specified in subdivision (b) of Section 3289 of the Civil
Code, which shall accrue from the date that the wages were due and
payable as provided in Part 1 (commencing with Section 200) of
Division 2.
  SEC. 6.  Section 226 of the Labor Code is amended to read:
   226.  (a) Every employer shall, semimonthly or at the time of each
payment of wages, furnish each of his or her employees, either as a
detachable part of the check, draft, or voucher paying the employee's
wages, or separately when wages are paid by personal check or cash,
an itemized statement in writing showing (1) gross wages earned, (2)
total hours worked by the employee, except for any employee whose
compensation is solely based on a salary and who is exempt from
payment of overtime under subdivision (a) of Section 515 or any
applicable order of the Industrial Welfare Commission, (3) the number
of piece-rate units earned and any applicable piece rate if the
employee is paid on a piece-rate basis, (4) all deductions, provided,
that all deductions made on written orders of the employee may be
aggregated and shown as one item, (5) net wages earned, (6) the
inclusive dates of the period for which the employee is paid, (7) the
name of the employee and his or her social security number, (8) the
name and address of the legal entity that is the employer, and (9)
all applicable hourly rates in effect during the pay period and the
corresponding number of hours worked at each hourly rate by the
employee.
   The deductions made from payments of wages shall be recorded in
ink or other indelible form, properly dated, showing the month, day,
and year, and a copy of the statement or a record of the deductions
shall be kept on file by the employer for at least three years at the
place of employment or at a central location within the State of
California.
   An employer that is required by this code or any regulation
adopted pursuant to this code to keep the information required by
this section shall afford current and former employees the right to
inspect or copy the records pertaining to that current or former
employee, upon reasonable request to the employer.  The employer may
take reasonable steps to assure the identity of a current or former
employee.  If the employer provides copies of the records, the actual
cost of reproduction may be charged to the current or former
employee.
   This section does not apply to any employer of any person employed
by the owner or occupant of a residential dwelling whose duties are
incidental to the ownership, maintenance, or use of the dwelling,
including the care and supervision of children, or whose duties are
personal and not in the course of the trade, business, profession, or
occupation of the owner or occupant.
   (b) Any employee suffering injury as a result of a knowing and
intentional failure by an employer to comply with subdivision (a)
shall be entitled to recover the greater of all actual damages or
fifty dollars ($50) for the initial pay period in which a violation
occurs and one hundred dollars ($100) per employee for each violation
in a subsequent pay period, not exceeding an aggregate penalty of
four thousand dollars ($4,000), and shall be entitled to an award of
costs and reasonable attorney's fees.
   (c) This section does not apply to the state, or any city, county,
city and county, district, or any other governmental entity.
  SEC. 7.  Section 226.7 is added to the Labor Code, to read:
   226.7.  (a) No employer shall require any employee to work during
any meal or rest period mandated by an applicable order of the
Industrial Welfare Commission.
   (b) If an employer fails to provide an employee a meal period or
rest period in accordance with an applicable order of the Industrial
Welfare Commission, the employer shall pay the employee one
additional hour of pay at the employee's regular rate of compensation
for each work day that the meal or rest period is not provided.
  SEC. 8.  Section 350 of the Labor Code is amended to read:
   350.  As used in this article, unless the context indicates
otherwise:
   (a) "Employer" means every person engaged in any business or
enterprise in this state that has one or more persons in service
under any appointment, contract of hire, or apprenticeship, express
or implied, oral or written, irrespective of whether the person is
the owner of the business or is operating on a concessionaire or
other basis.
   (b) "Employee" means every person, including aliens and minors,
rendering actual service in any business for an employer, whether
gratuitously or for wages or pay, whether the wages or pay are
measured by the standard of time, piece, task, commission, or other
method of calculation, and whether the service is rendered on a
commission, concessionaire, or other basis.
   (c) "Employing" includes hiring, or in any way contracting for,
the services of an employee.
   (d) "Agent" means every person other than the employer having the
authority to hire or discharge any employee or supervise, direct, or
control the acts of employees.
   (e) "Gratuity" includes any tip, gratuity, money, or part thereof
that has been paid or given to or left for an employee by a patron of
a business over and above the actual amount due the business for
services rendered or for goods, food, drink, or articles sold or
served to the patron.  Any amounts paid directly by a patron to a
dancer employed by an employer subject to Industrial Welfare
Commission Order No. 5 or 10 shall be deemed a gratuity.
   (f) "Business" means any business establishment or enterprise,
regardless of where conducted.
  SEC. 9.  Section 351 of the Labor Code is amended to read:
   351.  No employer or agent shall collect, take, or receive any
gratuity or a part thereof that is paid, given to, or left for an
employee by a patron, or deduct any amount from wages due an employee
on account of a gratuity, or require an employee to credit the
amount, or any part thereof, of a gratuity against and as a part of
the wages due the employee from the employer.  Every gratuity is
hereby declared to be the sole property of the employee or employees
to whom it was paid, given, or left for.   An employer that permits
patrons to pay gratuities by credit card shall pay the employees the
full amount of the gratuity that the patron indicated on the credit
card slip, without any deductions for any credit card payment
processing fees or costs that may be charged to the employer by the
credit card company.  Payment of gratuities made by patrons using
credit cards shall be made to the employees not later than the next
regular payday following the date the patron authorized the credit
card payment.
  SEC. 10.  Section 1174 of the Labor Code is amended to read:
   1174.  Every person employing labor in this state shall:
   (a) Furnish to the commission, at its request, reports or
information that the commission requires to carry out this chapter.
The reports and information shall be verified if required by the
commission or any member thereof.
   (b) Allow any member of the commission or the employees of the
Division of Labor Standards Enforcement free access to the place of
business or employment of the person to secure any information or
make any investigation that they are authorized by this chapter to
ascertain or make.  The commission may inspect or make excerpts,
relating to the employment of employees, from the books, reports,
contracts, payrolls, documents, or papers of the person.
   (c) Keep a record showing the names and addresses of all employees
employed and the ages of all minors.
   (d) Keep, at a central location in the state or at the plants or
establishments at which employees are employed, payroll records
showing the hours worked daily by and the wages paid to, and the
number of piece-rate units earned by and any applicable piece rate
paid to, employees employed at the respective plants or
establishments.  These records shall be kept in accordance with rules
established for this purpose by the commission, but in any case
shall be kept on file for not less than two years.
  SEC. 11.  The amendments to Section 218.5 of the Labor Code made by
Section 4 of this act do not constitute a change in, but are
declaratory of, the existing law, and these amendments are intended
to reflect the holding of the Court of Appeal in Early v. Superior
Court (2000) 79 Cal.App.4th 1420.
  SEC. 12.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.
